This Article, the first of its kind, addresses the question of imposition of sales tax on Cloud computing transactions in India. Several industry estimates show that the Cloud computing market is growing in India and is poised to grow further. However, the question of how to tax these transactions remains to be addressed. This Article engages with this question, albeit only in the context of sales tax. The Indian Constitution lays down, in elaborate detail, the taxes that can exclusively be levied by the Union Parliament and those that can exclusively be levied by the State Legislatures. Sales tax on intrastate transactions of a sale, a local sales tax, can be levied exclusively by State Legislatures. Keeping in mind the elaborate constitutional arrangement, the history of the levy of sales tax on software sale transactions in India and the well-established jurisprudence of the Supreme Court of India on the point, this Article argues that local sales tax on Cloud computing transactions cannot be levied by the State Legislatures. The Indian Constitution allows the State Legislatures to levy sales tax on certain transactions by a deeming fiction of law. In other words, certain transactions can be deemed to be a ‘sale’ even if they truly are not. Relying on the well-established interpretation of those constitutional provisions by the Supreme Court of India, this Article argues that such deeming fictions of law provided for in the Indian Constitution cannot be extended to Cloud computing transactions. Article 366(29A) of the Indian Constitution provides that certain transactions, even if they are not ‘sales’ may be deemed to be ‘sale’ in order for the State Legislatures to levy local sales tax. This Article anticipates that if the State Legislatures attempt to levy local sales tax on Cloud Computing transactions, recourse would necessarily be had to Article 366(29A). But if the Supreme Court’s well-established jurisprudence on the point is to be considered, the Court has never allowed the State Legislatures to take liberty with the words of Article 366(29A). This Article attempts to demonstrate that the text of the deeming fiction provisions in Article 366(29A), as consistently interpreted by the Supreme Court, would not allow the State Legislatures the constitutional competence to deem a Cloud computing transaction as a sale in order to levy local sales tax on such transactions. The Article also flags the point that the text of Article 366(29A), if interpreted in its true context, is not capable of bearing an interpretation that would allow a Cloud computing transaction to be deemed a sale.